Berg: Northern Illinois University President to receive $600K severance package

Austin Berg, Contributing columnist

Published
12:36 pm CDT, Monday, June 19, 2017

Image
1of/3

Caption

Close

Image 1 of 3

Berg: Northern Illinois University President to receive $600K severance package

1 / 3

Back to Gallery

Administrative costs at Illinois universities have spun out of control. The latest example comes as the Northern Illinois University Board of Trustees voted to approve a $600,000 golden parachute for President Doug Baker.

The Northern Illinois University Board of Trustees voted June 15 to gift President Doug Baker a $600,000 severance package, according to the Daily Chronicle.

Baker is resigning from his post after public release of a state investigation into his mismanagement of the university.

The report centered on NIU’s combined $1 million paid to at least five people the university hired as though they were part-time instructors in order to avoid competitive bidding requirements.

“Over a nearly two-year period after President Baker took office, NIU administrators committed a pattern of circumventing procurement requirements and violating employment policies and rules,” investigators found, “largely in an effort to meet President Baker’s directives to select high-paid consultants (one of whom was a friend), and pay for their travel and lodging, without restrictions.”

The NIU Board of Trustees received this report in August 2016, according to the Daily Chronicle.

Under the deal, Baker will receive a full year’s salary of $450,000. Additionally, Baker will get $137,000 in exchange for resigning from his position in the NIU College of Business. He also will receive up to $30,000 for his “reasonable, unpaid expenses for legal counsel” related to his employment at the university.

Not the first time

Baker’s is just the latest high-profile “golden parachute” within Illinois higher education over the last two years.

In 2015, the College of DuPage Board of Trustees approved a $763,000 severance package for President Robert Breuder in exchange for his retirement. (A new, reform-minded majority on the board of the Glen Ellyn community college later challenged that payout.) The Tribune pegged Breuder’s haul as “one of the largest severance packages for a public employee in state history.”

Under Breuder’s watch, Illinois’ second-largest college hid more than $95 million in spending – including hundreds of thousands of dollars in payments to businesses connected to college leadership, payments for satellite phones used for Breuder’s exotic hunting trips, his membership to a private shooting club and nearly a quarter million dollars in booze listed on ledger lines as “instructional supplies.”

Shortly after the Breuder scandal, Gov. Bruce Rauner signed two reform bills aimed at the problem of lucrative, taxpayer-funded severance packages.

The first measure subjected all entirely or partially publicly funded severance agreements to the state’s Freedom of Information Act. The second was a taxpayer-protection law limiting severance pay at community colleges. The law caps severance payments at one year’s salary and benefits and limits standard contracts to four years for community-college employees a collective bargaining agreement does not cover.

The severance cap law was not extended to public universities. But even if it had been, it’s unclear whether it could have prevented the large payout gifted to Baker, given his high annual salary.

The NIU president isn’t the only member of the $600,000 club. Chicago State University President Thomas Calhoun Jr. received a $600,000 severance deal in 2016 after working just nine months into his five-year contract.

Baker’s rich payout isn’t even the only scandal that has dogged NIU as of late. In 2013, former NIU Associate Vice President Robert Albanese plead guilty to leading a ring of employees in selling university-owned scrap metal and putting the proceeds into a privately held bank account called the “coffee fund.”

Albanese was taking home a base salary of nearly $197,000 before he resigned, according to the Illinois Board of Higher Education.

These golden parachute severance packages and wasteful spending scandals reflect an underlying problem in Illinois: the misplaced priorities within its higher education system. Administrative payrolls and benefits have exploded, while students and taxpayers struggle to pay for it all.

The number of university administrators in Illinois grew by a third between 2004 and 2010, while the number of students grew by less than 3 percent, according to a report from the Illinois State Senate Democratic Caucus.

And those administrators don’t come cheap. Over half of Illinois’ 2,465 university administrators received a base salary of $100,000 or more in 2015. These hefty salaries lead to ballooning retirement costs that crowd out spending on students.

In 2015, more than 50 percent of the state’s $4.1 billion budget for public universities was spent on retirement costs alone.

For years, leadership took state and federal dollars and spent them not on student needs, but on swelling administrative rolls and compensation. And then they hiked tuition.

Tuition has been increasing dramatically at Illinois’ public universities for more than a decade, according to the Illinois Board of Higher Education. Combined student tuition and fees grew anywhere from 74 to 112 percent between 2006 and 2016, depending on the university.

University of Illinois charges the highest average in-state tuition in the Midwest, compared with each state’s flagship university.

Baker’s large severance package is a symptom of a larger problem within Illinois universities, and points to the need for a radical revision of priorities when it comes to educating the next wave of Illinois scholars.

Austin Berg is a writer for the Illinois Policy Institute. He wrote this column for the Illinois News Network, a project of the Institute. Austin can be reached at aberg@illinoispolicy.org.